The Tucson Association of Realtors has published the Residential Sales Statistics for April, and once again, Everything's Coming Up Saguaro Blossoms for You and Me. Average sale price was $175,766, up 4.5% from March, and up 1% from last April. 1,276 units were sold, a 10.7% increase from last April. Most amazing, number of listings is way, way down to 3,770, a 40% decline from April 2011. We have a three-month supply of listings. Anything below a six month supply is a sellers' market.
And indeed it is. Bidding wars are back. I just beat out five other offers on a property by offering $1,000 above any competing offer, and waiving the appraisal. It's like 2005 all over again.
However, I don't think we will see a return to the insane price increases of the mid-aughts. These days, buyers need be qualified for a mortgage. Investors, who used to buy a house under construction with the intention of doing no work and selling for a profit once the house was completed, no longer have that option. Today's investors are paying cash for uninhabitable houses, renovating them, and reselling to people who will live in them. It's great to see all those abandoned, trashed houses becoming homes again.
We have now seen the average sale price increase in six of the last seven months. Tucson real estate is looking really good. I get several calls a week from investors who want to get on the fix and flip gravy train, but with rising prices and increased activity among investors, it has become difficult to find a housing bargain. Most people who call me want to buy a $30,000 to $40,000 house in a decent area. I tell them they have a lot of competition.
Foreclosures were 30% of the sales, and short sales were 13% of the sales. It's a relief to see distressed sales comprising less than half of the sales. As prices rise, fewer homeowners will find themselves under water when they need to sell. I am doing more of what we used to call "normal" sales: no banks involved on the seller's side.
Monday, May 21, 2012
Buying a Condo in Tucson? Consider This.
Most of the condo listings in Tucson indicate that a buyer can purchase the condo using FHA financing. Most of the time, this is not true.
The Department of Housing and Urban Development (HUD), the agency that insures FHA mortgages, established some rules last year that created huge liability for condo complexes that want to allow FHA financing. As a result, only three condo complexes currently qualify for FHA financing.
I explained the risks of obtaining HUD certification in my 7/23/11 blog post.
The eligible complexes, and the date their HUD certification expires are 1) Midtown Condominiums, 3646 E Blacklidge Dr., 9/28/2012, 2) Pinnacle Canyon Condominiums, 6/21/2013, and 3) Tierra Catalina Condominiums, 3201 E Skyline Dr., 4/7/2013.
Condos Eligible for FHA Financing in Tucson.
The Department of Housing and Urban Development (HUD), the agency that insures FHA mortgages, established some rules last year that created huge liability for condo complexes that want to allow FHA financing. As a result, only three condo complexes currently qualify for FHA financing.
I explained the risks of obtaining HUD certification in my 7/23/11 blog post.
The eligible complexes, and the date their HUD certification expires are 1) Midtown Condominiums, 3646 E Blacklidge Dr., 9/28/2012, 2) Pinnacle Canyon Condominiums, 6/21/2013, and 3) Tierra Catalina Condominiums, 3201 E Skyline Dr., 4/7/2013.
Condos Eligible for FHA Financing in Tucson.
Wednesday, May 2, 2012
The Truth About Investing in Tucson Real Estate
I have received several calls in the past few weeks, all from Californians, who have heard that the National Association of Realtors has declared Tucson to be the best place in the country for real estate investment. The whole country is abuzz with the news that investors are paying $40,000 for houses here and flipping them. This is true. The missing piece of this exciting news is that a $40,000 house is uninhabitable and/or not in a great part of town.
As of today, we have 231 listings priced under $50,000 in the Tucson Multiple Listing Service. Take out the coops, the condos, the townhouses, the mobile homes and the manufactured homes and we have 59 single family houses priced under $50,000.
In April, 69 single family houses priced under $50,000 were sold through the MLS. A few others were sold at trustee sale, but that is the subject for another blog entry. Of those 69 single family houses, 51 were foreclosures, and 8 were short sales. So only 10 sales were what we used to consider "normal sales": the seller was a person, not a bank, and that person had equity in his house.
In April, the 59 foreclosures and short sales were what we call "distressed sales". Distressed is supposed to describe the financial circumstances under which the house is being sold, but I would venture to say that in most cases the buyer was pretty distressed before the sale was completed.
The investors who are profiting from Tucson's low prices are already here in Tucson. They are able to act decisively when one of these bargains becomes available. They pay cash, and have the knowledge, contractors and money to get the house renovated and back on the market quickly.
The number of houses for sale is way down. The number of buyers is way up, back to 2007 levels, before the housing market imploded. Fixing and flipping houses is a very competitive business. NPR got it right yesterday in their segment on Arizona real estate.
I still think Tucson is a great place to own a home and rentals. Some investors are making a killing here, but they are fix and flip pros. For the rest of us, the best strategy may be to buy a house in good condition in a good neighborhood, rent it out or live in it for a a few years, and hope that the current upward trend in home appreciation continues.
As of today, we have 231 listings priced under $50,000 in the Tucson Multiple Listing Service. Take out the coops, the condos, the townhouses, the mobile homes and the manufactured homes and we have 59 single family houses priced under $50,000.
In April, 69 single family houses priced under $50,000 were sold through the MLS. A few others were sold at trustee sale, but that is the subject for another blog entry. Of those 69 single family houses, 51 were foreclosures, and 8 were short sales. So only 10 sales were what we used to consider "normal sales": the seller was a person, not a bank, and that person had equity in his house.
In April, the 59 foreclosures and short sales were what we call "distressed sales". Distressed is supposed to describe the financial circumstances under which the house is being sold, but I would venture to say that in most cases the buyer was pretty distressed before the sale was completed.
The investors who are profiting from Tucson's low prices are already here in Tucson. They are able to act decisively when one of these bargains becomes available. They pay cash, and have the knowledge, contractors and money to get the house renovated and back on the market quickly.
The number of houses for sale is way down. The number of buyers is way up, back to 2007 levels, before the housing market imploded. Fixing and flipping houses is a very competitive business. NPR got it right yesterday in their segment on Arizona real estate.
I still think Tucson is a great place to own a home and rentals. Some investors are making a killing here, but they are fix and flip pros. For the rest of us, the best strategy may be to buy a house in good condition in a good neighborhood, rent it out or live in it for a a few years, and hope that the current upward trend in home appreciation continues.
Certified Check or Wired Funds
Experienced real estate agents are always evaluating the home inspectors, loan officers, escrow officers and other people we encounter who can help us with our business. We have assembled our teams of experienced, conscientious and reliable professionals, and we refer our clients to our team mates so the sales transaction goes as smoothly as possible.
The escrow company handles the paperwork and the money in a real estate sale. If this job isn't done correctly, the repercussions can take years to resolve. I know this from personal experience.
Unfortunately, when we are selling a foreclosure, we usually have to work with the escrow company that the seller chooses, and this company is often in Phoenix or California.
One of my fellow agents recently had an unpleasant experience with an out of town escrow company. The buyer signed settlement documents in Tucson, and provided a certified check for down payment and closing costs. The signed documents and check were Fed Exed to the out of town escrow officer. Upon arrival, the certified check was missing.
Issuing a replacement check can take up to 90 days. The buyer could lose the opportunity to buy the house, just as he was packing the moving truck. You can imagine the heartache.
The solution is to wire the funds to the escrow company. If a wire is misplaced, it can be tracked and resubmitted.
Incidentally, I got this tip through my company's interoffice communications. Working with a large company where many agents share their learning experiences and advice helps me avoid making mistakes on my own transactions. I am so glad I moved to Tierra Antigua Realty.
The escrow company handles the paperwork and the money in a real estate sale. If this job isn't done correctly, the repercussions can take years to resolve. I know this from personal experience.
Unfortunately, when we are selling a foreclosure, we usually have to work with the escrow company that the seller chooses, and this company is often in Phoenix or California.
One of my fellow agents recently had an unpleasant experience with an out of town escrow company. The buyer signed settlement documents in Tucson, and provided a certified check for down payment and closing costs. The signed documents and check were Fed Exed to the out of town escrow officer. Upon arrival, the certified check was missing.
Issuing a replacement check can take up to 90 days. The buyer could lose the opportunity to buy the house, just as he was packing the moving truck. You can imagine the heartache.
The solution is to wire the funds to the escrow company. If a wire is misplaced, it can be tracked and resubmitted.
Incidentally, I got this tip through my company's interoffice communications. Working with a large company where many agents share their learning experiences and advice helps me avoid making mistakes on my own transactions. I am so glad I moved to Tierra Antigua Realty.
Friday, April 20, 2012
Why Not?
If you have survived the Great Recession with some cash to spare, and you don't own a house in Tucson, I have two words for you: Why Not?
Once again, Tucson is at the top of the list of best places to invest in real estate. This time, it's Forbes Magazine singing the praises of our Sweet Desert Home.
This is just what I said when I posted the March Residential Sales Statistics, except I didn't know our unemployment rate is lower than the national average.
The rest of the Forbes article is here.
Once again, Tucson is at the top of the list of best places to invest in real estate. This time, it's Forbes Magazine singing the praises of our Sweet Desert Home.
If you want to buy low, foreclosure-riddled Tucson, Ariz., may be just the place. It ranks No. 1 on this list.
Home prices in the Old Pueblo are down more than 45% from their peak, according to the Fiserv Case-Shiller index and the February median list price for a home headed to market was $170,000, about 3% higher than it was this time last year, according to Realtor.com. The number of REOs (bank-owned homes) for sale is down 8% from February of 2011 and the number of foreclosures scheduled for sale has dropped 40%. Sales have also picked up, decreasing inventory levels. Single-family houses and condos are selling 12% faster than they were a year ago, averaging 86 days on the market (the national average is 111). The Tucson Association of Realtors reports that the total number of sales were up 16% in February from the same month a year ago.
“In the case of Tucson, you are looking at foreclosures dropping back quite a bit coupled with a stable employment market,” says Berkowitz. The area has a 7.8% unemployment rate, a tad lower than the national average of 8.2%, helped by the presence of sizable employers in the recession-resistant education and government sectors, including the University of Arizona, Davis-Monthan Air Force Base and the U.S. Army Intelligence Center. All of this suggests Tucson’s housing market may be bottoming.
This is just what I said when I posted the March Residential Sales Statistics, except I didn't know our unemployment rate is lower than the national average.
The rest of the Forbes article is here.
Wednesday, April 18, 2012
Space Shuttle Discovery
My fabulous client Alona, who has become one of my favorite people, was on the National Mall yesterday when the Discovery Space Shuttle flew over the original Smithsonian on its way to its permanent home at the Smithsonian annex of the Air and Space Museum at Dulles Airport. She was so excited, she got on ABC news. You should have seen how she reacted to the Winterhaven Festival of Lights. This lady loves life in a big way.
Sunday, April 15, 2012
Bought Their Vacation Home Sight Unseen
I was referred to Donna Moulton in 2005 by a mutual friend. My husband and I were interested in purchasing a townhome that we could use as a winter getaway. We were in New England, and it just wasn’t possible to go look at each property that interested us. We knew we wanted to be centrally-located and we gave Donna a few criteria.
Donna and I both kept an eye on the MLS listings, and if something looked promising, she would tour the property, take many photos of the inside, outside, and the neighborhood, and send them to me immediately. Most of the time, she recommended against purchasing a particular property. The neighborhood might not be what we wanted, or the floor plan was funky, the views were not good, etc etc. Donna has a great sensibility when it comes to real estate, and I grew to trust it.
Eventually a property came up and the listing looked promising. She immediately went to take a look and reported that “this is the one.” We purchased the property without seeing it firsthand!!!! It sounds crazy, but I never hesitated. When we saw it a few months after buying it, there were no surprises. It was exactly what we expected.
We eventually moved to Tucson full time and Donna helped us purchase another property. We kept our little winter getaway, and it may eventually become our retirement home when we scale down.
I recommend Donna highly. She is trustworthy, and she understands the real estate market like no one else. I think her science background gives her the edge when it comes to analyzing properties and the market in general. She really looks after her clients’ best interests.
Alison Jones
Donna and I both kept an eye on the MLS listings, and if something looked promising, she would tour the property, take many photos of the inside, outside, and the neighborhood, and send them to me immediately. Most of the time, she recommended against purchasing a particular property. The neighborhood might not be what we wanted, or the floor plan was funky, the views were not good, etc etc. Donna has a great sensibility when it comes to real estate, and I grew to trust it.
Eventually a property came up and the listing looked promising. She immediately went to take a look and reported that “this is the one.” We purchased the property without seeing it firsthand!!!! It sounds crazy, but I never hesitated. When we saw it a few months after buying it, there were no surprises. It was exactly what we expected.
We eventually moved to Tucson full time and Donna helped us purchase another property. We kept our little winter getaway, and it may eventually become our retirement home when we scale down.
I recommend Donna highly. She is trustworthy, and she understands the real estate market like no one else. I think her science background gives her the edge when it comes to analyzing properties and the market in general. She really looks after her clients’ best interests.
Alison Jones
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